?EE 11-8 p. 559 PE 11-8A Quick ratio
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OBJ. 6
Nabors Company reported the following current assets and liabilities for December 31
for two recent years:
AI
Dec. 31, Current Year
Dec. 31, Previous Year
Cash
$ 650
$ 680
Temporary investments
1,500
1,550
Accounts receivable
700
770
Inventory
1,250
1,400
Accounts payable
2,375
2,000
a. Compute the quick ratio on December 31 of both years.
b. Interpret the company's quick ratio. Is the quick ratio improving or declining?